Mumbai: IIHL has not yet received approval from insurance watchdog Irdai for its Rs 9,650 crore acquisition of Reliance Capital, its Chairman Ashok Hinduja has said. Saying that IIHL has been in touch with the Insurance Regulatory and Development Authority of India (IRDAI) since November on the deal, he said IIHL is “hopeful” of getting the approval as soon as possible and added that generally, such approvals Is available. Comes in 2-3 months.
Speaking to reporters here over the weekend, Hinduja said IIHL would be able to pay the bid amount and complete the deal within 48 hours of Irdai's approval.
With a little more than three weeks left for the National Company Law Tribunal's May 27 deadline to execute the Rs 9,650 crore buyout of RCAP, Mauritius-based IIHL has signed a Rs 7,500 crore settlement with multiple banks, Ashok Hinduja said. Have done. For acquisition.
Refusing to give any details about the banks offering the funds, Hinduja said there is one major bank that will arrange the funds when the time comes, and said there was “over-subscription” among lenders in offering the money. Is.
The remaining portion of over Rs 2,000 crore will be IIHL's equity, Hinduja said.
On February 27, the Mumbai bench of NCLT approved the resolution plan submitted by IIHL to take over RCAP, which also includes general and life insurance businesses.
He said in the absence of necessary approvals for the deal, no buyer will make the final payment and will approach for extension if approval is not received by the May 27 deadline.
The deal has received green signal from the RBI, Competition Commission of India and capital markets regulator SEBI, he said, while IIHL has been in talks with the RBI for over two decades and also qualifies under its 'fit and proper' criteria. Is. , It is new in the insurance sector.
According to recent media reports, IRDAI has some concerns about the deal including possible violation of FDI limits in insurance companies, dependence on borrowings to buy insurance entities and ambiguity in the structure of IIHL.
Hinduja declined to comment on media reports, but wondered how confidential communications get out in the open.
He said IIHL is based in Mauritius and is owned by 600 high-net individuals.
He said the Hinduja family is the promoter of IIHL, who has got the platform, but they have less than 10 per cent stake in it. He said that he has no stake in IIHL.
On a question about Torrent Investments, the other bidder for the RCAP resolution, challenging the NCLT decision in the Supreme Court, Hinduja said IIHL will go ahead with the payment even if the Supreme Court decision is pending and said the top The court has not given any permission. Stick to the process.
A group of IIHL teams are already in talks with RCAP businesses and formulating strategies, he said, adding that all talent will be retained at RCAP. He said some institutions, including RCAP board members, are seeing retirement or expiry of tenure of some senior officials, and they will also see replacement.
Hinduja said, once the acquisition is completed, IIHL plans to sell real estate investments that come with the transaction, which will fetch it about Rs 250 crore.
He said the plan is to expand general and life insurance branches and he is also in touch with Japanese partner Nippon. Asked whether the Japanese partner would like to increase its stake beyond the current 49 per cent, Hinduja said IIHL generally prefers to have majority ownership in its businesses.
IIHL will also launch a health insurance business for which RCAP had the license, he said, adding that the branding will also be changed eventually.
The near-term objective is to maximize value for IIHL's shareholders, the chairman said.
IIHL, which is also the promoter of IndusInd Bank, said it now aims to see the overall valuation of its owned or promoted financial services businesses in India cross USD 50 billion by 2030, up from USD 30 billion a year. is more. -Before purchasing RCAP.
He said the majority of the US$30-35 billion valuation would come from gains in IndusInd Bank shares, while the rest would be spread across other businesses including insurance arms and the newly acquired asset management business.
A senior group official said IndusInd Bank's market capitalization is currently around US$14 billion, and the plan is to take the overall valuation of all businesses to US$20 billion in three years and then to US$50 billion by 2030 .
Hinduja said IIHL would also consider listing on fund-raising platform Afrinex in the next few years, but declined to give a timeline.
Asked about the proposal to increase its stake in IndusInd Bank to 26 per cent from the current 15 per cent, Hinduja said IIHL is in touch with the RBI and will make the final application for increasing the stake in the next few weeks.
He said it would like to raise the stake in phases as per the growth capital requirements of the lender, and added that once the procedural requirements are met, it will immediately buy Rs 200 crore worth of stock from the market.
